KAFD will have an 'adverse' effect on Riyadh’s office market: Shelash

The King Abdullah Financial District will have devastating effects on Riyadh’s office market, said Yousef Shelash, chairman of Dar Al Arkan Real Estate, Saudi's largest developer by market value. 

“Unfortunately, this project destroyed the office market in Riyadh – at least for the next 5-10 years,” he said in an interview with Construction Week Online. 

He pointed out that it will cause a huge oversupply in the market from the moment the first buildings open next year.

The 59-tower financial district will also have an adverse effect on private sector developers, Shelash said.

KAFD is funded by the government-owned Raydah Investment Corporation.

Shelash pointed out that the government’s role in the real estate market should be strictly regulatory. 

KAFD is expected to be completed next year, and will be built by Saudi’s Bin Laden Group.

In its recent report on Riyadh’s office market, Jones Lang LaSalle predicted that one million square meters of office space will be added to the city’s market by the end of 2016. The majority of offices will be at KAFD. This increases office space in the capital by 43 percent from its current 2.3 million square meters.